Ligand, Elan Agree On Early Conversion of $20 Million Note, Early Exercise of Ligand Warrants
Conversion Completes Elimination of Elan Debt from Ligand's Balance Sheet
SAN DIEGO--(BW HealthWire)--April 1, 2002-- Ligand Pharmaceuticals Incorporated (Nasdaq: LGND - news) announced today that Elan Corporation, plc (NYSE: ELN - news) has agreed to convert a zero-coupon convertible note issued in 1999 at a price of $20 million ($24.7 million including accrued interest) into 1.8 million shares of Ligand common stock.
Ligand will recognize a one-time charge, arising from the agreement, of $2.0 million in the first quarter of 2002, and will eliminate, beginning in the second quarter, $2.0 million of annual accretion from the note to non-operating expenses going forward. The conversion eliminates all Elan-related debt from Ligand's balance sheet.
``We are pleased with Elan's early conversion decision, which is another important milestone in our 2002 goal to eliminate debt and strengthen our balance sheet,'' said Paul V. Maier, Ligand Senior Vice President and Chief Financial Officer. ``This final conversion of outstanding Elan debt will strengthen our balance sheet, increase shareholders' equity and lower our future interest expense. In addition to contributing to Ligand's financial strength, the reduction in future interest expense will enhance our ability to translate future operating profits to earnings per share.''
Elan also has elected to exercise its 91,406 Ligand warrants at $10/share, resulting in proceeds to Ligand of $914,060. Ligand issued the warrants to Elan in 1999.
After the debt conversion and warrant exercise, Elan's ownership in Ligand will be approximately 21.6% on a primary basis and 19.7% on a fully diluted basis. |
